Safety not PUC's top priority, execs say

Updated 10:41 pm, Tuesday, April 16, 2013

Firefighters battle a fire that destroyed an entire neighborhood on Claremont Drive in San Bruno in September 2010. The blaze was caused by a natural gas explosion at an underground PG&E pipeline.

Firefighters battle a fire that destroyed an entire neighborhood on Claremont Drive in San Bruno in September 2010. The blaze was caused by a natural gas explosion at an underground PG&E pipeline.

Photo: Brant Ward, The Chronicle

Safety not PUC's top priority, execs say

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Sacramento --

Top executives and others at the California Public Utilities Commission told interviewers that the agency has an overly cozy relationship with the utilities it regulates and fosters a lackadaisical culture that discourages tough enforcement and fines, according to a confidential report obtained by The Chronicle.

The report by a business consulting group found that public safety was not the top priority at the agency that is responsible for ensuring the safety of gas pipelines and other utility-related infrastructure. Instead, the PUC remains focused on pursuing affordable rates and environmental concerns, workers said.

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Business Advantage Consulting of Folsom (Sacramento County) studied the PUC at its own behest as the agency drew criticism during the federal investigation of the PG&E gas line explosion in San Bruno that killed eight people in 2010. Critics said the agency should have better regulated the utility to ensure that it adhered to safety regulations.

Top PUC officials have previously acknowledged that public safety was not the highest priority before the San Bruno blast, and they pledged to change. In August 2011, Commission Executive Director Paul Clanon told a legislative committee, "The days of assuming a pipeline is safe unless we have reason to think it isn't - those days are over."

Utilities not challenged

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But agency staff members who were interviewed late last year said that public safety is still not a priority and that efforts to enhance it aren't taken seriously.

Some said internal efforts to focus on safety are nothing more than lip service, and they said Clanon exhibits "antisafety" attitudes and behaviors with his resistance to challenging utilities and levying fines.

Business Advantage Consulting reviewed PUC documents, interviewed 15 commission executives, including Clanon, and held focus groups with other staff members in an effort to create a change in the commission's operating culture regarding public safety.

No names are attached to the concerns raised, but those quoted had a wide variety of criticisms about the PUC and its public safety responsibilities.

"If we were enforcing the rules, we would not have to worry about a safety culture. If we were holding the utilities accountable and doing what we were supposed to be doing, San Bruno would never have happened," one person told interviewers.

Another said, "There has been a lot of lip service to safety. I have not seen enough action yet to back up the talk."

On the relationship between regulators and utilities, the report stated: "Several respondents report that both commissioners and PUC staff members have close ties to the industries that they are supposed to be regulating. This has resulted in reluctance on the part of commissioners and the PUC to impose significant fines and other consequences."

One person interviewed said, "The regulated industries and lobbyists come to the PUC and see how casual the attitude and culture is here. As a result, they don't feel that they have to comply - they are not worried. The message to them is that we are not paying attention."

'Views and perceptions'

The 24-page document states: "The issues identified in this report represent the views and perceptions of the respondents. This report is not an evaluation of the objective truth of those views and perceptions."

A statement from the commission in response to the report provided to The Chronicle asserted that the commission "has made safety an underlying principle in all of its actions." About the report, the statement said, "The report is the result of the informal survey; it is not an analysis of our safety culture or conclusions by our consultants, but a reporting-back of what some employees said in informal focus groups."

The report, and the PUC's efforts to fulfill its public safety requirements, will be discussed Wednesday at a legislative hearing at the Capitol, where Clanon is expected to testify.

The commission is determining how big of a fine to levy against PG&E for the San Bruno explosion, but the agency must first determine whether PG&E violated state rules.

Both the PUC and PG&E are headquartered in San Francisco.

In describing an "overly cozy relationship" with utilities, one person interviewed said, "For years, the commissioners did not want to levy fines for safety violations. The culture was, 'We will work with the utilities without using the stick.' "

Another said, "Safety staff did not feel empowered to suggest large fines because the commissioners would not approve them."

The Assembly Budget Subcommittee 3 on Resources and Transportation's analysis of the report states: "While the commission is to be applauded for bringing in a third party to help uncover and expose its safety culture issues, these findings are not only troubling but may surpass a consultant's ability to solve."

A year ago, PUC officials went before the committee and requested an additional $6.5 million from the Legislature for 46 additional safety positions.

But the Legislative Analyst's Office found that the commission had 31 vacant positions in its consumer safety division - money they could have spent for new people but didn't - and the Legislature ultimately approved about half of the PUC's request.

Developing a strategy

The commission has not requested more safety positions for the division in this year's budget.

"We will use the results of the report to help us define what we need to change, develop strategies and actions to implement the changes, and ensure accountability as the process continues," the PUC statement read.

The consulting firm sent the report with a date of Jan. 25 of this year. Clanon sent it to directors at the commission on Feb. 11. The next steps include the development of a strategy to create a safety culture, coaching sessions, assessments and finally a report on results.